Annual Report 2014-2015
Financial Report for the year ended 30 June 2015 Contents Notice of Annual Meeting 3 Membership 4 Chairman s Report 5 General Manager s Report 6 Treasurer s Report 7 Golf Report 9 Bowls Report 10 Audited Financials 11
Notice of Annual General Meeting Notice is hereby given that the 46th Annual General Meeting of Members will be held in the Pacific Room at the Clubhouse, Orana Road Ocean Shores NSW 2483 at 10am on Sunday 18th October 2015. Agenda 1. Declare the 46th Annual General Meeting open. 2. Attendance Roll 3. Apologies Ordinary Business 4. To receive and consider the minutes of the 45th Annual General Meeting held on Sunday 19th October 2014. 5. To receive and consider the reports of the Directors and Auditors for the year ended 30 June 2015. 6. To receive and consider the Financial Statements as at 30 June 2015 for the year ended on that date. (Any questions in regard to the contents of these reports are to be submitted in writing to the General Manager seven days prior to the AGM to enable a well-informed response to be made at the meeting) 7. To consider and approve benefits received by Directors and Committees Pursuant to Section 10(6) of the Registered Clubs Act 1976. To repay out of pocket expenses reasonably incurred by any member of the Board in the course of carrying out his or her duties for the Club provided that they are approved by the Board. 8. The members hereby approve and agree to the provision of a limited number of reserved car spaces in the Club s car park. 9. To deal with any other business for which due notice has been given. 10. To consider and approve benefits received by members who are accepted into the membership Category of Special Veterans for the membership year 2015-2016. 11. To elect the Board of Directors for 2015-2016 in accordance with the Clubs Constitution. Members please note point(s) 7, 8 and 10: that members acknowledge that the above benefits are not available to members generally but only for those that are specified in the above resolutions. By order of the Board of Directors Andrew Spice, JP General Manager September 14, 2015 Annual Report 2014-2015 3
ANNUAL REPORT 2014-2015 Membership The membership as at 30 June 2015 2014 2015 Life Member 1 1 Male Golf 258 247 Female Golf 49 53 Male Bowls 69 62 Female Bowls 38 34 Male Golf & Bowls 39 38 Female Golf & Bowls 2 2 Special Veteran Golfer (Male & Female) 42 28 Special Vet Golf /Bowls (Male & Female) 8 8 Ordinary (Male & Female) 9 8 Male Country Golf 36 31 Female Country Golf 5 6 Social (Male & Female) 2151 2366 Country Golf/Bowler (Male & Female) 1 0 Leave of Absence 0 0 Colt Golfers 11 8 Colt Golfer/Bowler 0 2 Mid Week Golfer (Male & Female) 127 127 Mid Week Golfer/Bowler (Male & Female) 13 14 Remote Golf (Male/Female) 0 8 Sub Total 2859 3043 Golfer Junior (Male & Female) 10 6 Golfer Cadet (Male & Female) 7 10 Junior Golfer/Bowler (Male & Female) 1 0 Cadet Golfer/Bowler (Male & Female) 0 0 Junior Bowls (Male & Female) 1 1 Cadet Bowler 1 0 Total 2879 3060 4 Annual Report 2014-2015
Chairman s Report On behalf of the Board of Directors, I am pleased to report on the Club s operations and activities for the 2014/15 year. The club recorded an operating profit of $103,227. This is considered a good result especially when the kitchen renovations increased depreciation by $35,893 from $260,650 in 2013/14 to $296,543 in 2014/15. Management and the Board are continually investigating where savings can be made, together with making the club more environmentally friendly. Our efforts in becoming more energy efficient by installing solar panels, upgrading refrigeration and air conditioning, and installing LED lighting saw the Office of Environment and Heritage upgrade the club to a Bronze Partner. Management, staff and Directors have again undertaken various courses and modules to reach our goal of optimum energy efficiency. Our project for next year involves improving our waste management by organised recycling, composting and subsequently establishing our own herb gardens and planting a variety of lemon and lime trees. Our major project for the 2015/16 Financial Year is the construction of a front deck. Work is expected to commence in February, 2016 and will hopefully be completed by Easter. Final Plans will be displayed in the clubhouse in the near future. I thank all the members who served on S.I.Gs and Board Sub Committees, with the Goonies, or in any other capacity. Your assistance has been invaluable. To our General Manager, Andrew, and his friendly and efficient staff, I convey the Board s appreciation for your efforts and dedication over the past year. Thank you to my fellow Directors for their support, and the manner in which they undertook their individual duties. It has again been a pleasure to be Chairman of such a dedicated, efficient and professional Board. Finally, I acknowledge our members, for your continued support of the club and our sporting facilities. Peter Tornaros Chairman Annual Report 2014-2015 5
ANNUAL REPORT 2014-2015 General Manager s Report It is with pleasure that I submit the General Manager s Report for the year ended 30 June 2015. Your Club achieved a trading profit for the year ended 30 June 2015 of $103,227. This compares to a profit of $138,293 achieved for 2014. The Board and Management continue to closely monitor the Club s income and expenditure, having regard to ongoing operational requirements including maintenance and provision of facilities. The Club has maintained the strong commitment and support of the Local Community through ongoing sponsorship and donations. During the year ended 30 June 2015 your Club gave financial support to the organisations listed inside the back cover of the annual report, combined with the donation of complimentary vouchers and products for use in fundraising. We continue to strive toward a more family friendly venue whilst meeting our obligations with respect to providing Golf & Bowls facilities. Our Annual Family Fun Day has helped growth in social membership and we are seeing the subsequent support from social members. Our Golf and Bowls Memberships remain steady and weather permitting usage in these areas is growing and well supported by members. Your Directors continue to attend seminars and undertake training, putting them in a good position with the Mandatory Director Training requirements under legislation. On behalf of the Management and Staff I thank the Directors for their ongoing support throughout the year. The Ocean Shores Country Club Staff show good team work in attending to the daily needs of members and Guests, and I look forward to us working together in continuing this over the years ahead. We are fortunate to have such a dedicated team of volunteers, there are far too many to name individually, but a big thank you to our many volunteers for your contributions over the year. I would like to congratulate the various golf and bowls winners. Also thank you to those who represented the Club in Pennants, I am sure you all performed admirably. Our contract caterers have supplied notice that they are moving on. Many thanks to Dino & Kate, and their staff for the professional service and top quality food they provide through Meraki Bistro. We wish them all the best with their new venture. Members make a Club and I thank you, our members, for your support and ongoing patronage. Andrew Spice, JP General Manager 6 Annual Report 2014-2015
Treasurer s Report The operating profit for this year was a good result taking into account the increased depreciation figure. This figure will continue to increase in the coming years, due to the capital works program the club has in place. However the timing for these works will be adjusted as required, as was necessary this year with the renovation of the kitchen being moved forward. 2015 2014 Operating Profit 103,227 138,293 Depreciation 296,543 260,650 Disposal of Assets -11,943-5,774 Contribution Areas 2015 2014 Bar 266,130 283,825 Poker Machines 750,546 761,710 KENO 55,098 44,937 Golf 16,987-48,508 Bowls -35,900-21,117 House -583,517-539,356 Administration -397,909-379,423 TAB -6,839-8,516 Halfway House 12,856 16,546 Pro Shop 21,089 24,757 Men's Golf 2,374 760 Ladies Golf - 893-437 Men's Veteran Golf 3,389 902 Women's Bowls 1,894 1,060 Men's Bowls -2,077 1,152 Capital Expenditure 2014/15 Irrigation Stage 2 77,097 Golf Course Utility 10,264 Poly Welder & Scrapper 6,350 Site Office & Staff Amenities Golf Course 13,467 Fire Extinguisher Fuel & Chemical Storage Area 570 Fertilizer Spreader 850 Annual Report 2014-2015 7
ANNUAL REPORT 2014-2015 Capital Expenditure Continued 2014/15 Aerator Irrigation Pump 2,207 Stihl Blower 454 Polisher Roller-Top Green 6,000 Artificial Plants 1,260 CCTV 1,994 Directors & Management Board 954 Pie Warmer 455 Fire Alarm Buggy Shed 5,041 Advertising Stands 950 Photocopier 15,420 Website and TV Commercials 5,208 Coffee Machine 690 Pro Shop & Breezeway Carpet 6,530 Pro Shop & Sunset Room Blinds 4,580 BBQ 635 Kitchen & Loading Dock Storage Area 196,841 Poker Machines 20,990 Online Bowls Booking System 3,182 Sub Total 381,989 The club is in a strong financial position. Looking forward it is important the Board and Management take into account the club s demographics and community requirements when introducing future member services. I would like to thank the following:- The members of the Finance Committee, Trish, Shane, Troy, Chris, Col and Andrew. The goonies for the contribution they make to the club. The Board members and staff who are part of Sustainability Advantage, the club is seeing financial and environmental benefits from your efforts. The General Manager Andrew and the office staff Trish, Alison and Angela. The outdoor, in house, pro shop and HWH staff thank you. As always, the members, thank you for your support, without which this great club could not exist. Anne Slater Treasurer 8 Annual Report 2014-2015
Golf Management Committee Report Over the last year our golf course has continued to improve in both appearance and playability with the ongoing conversion to couch fairways, reconstruction of the bunkers to assist drainage and tee upgrading. The irrigation replacement program will see the 12th hole completed in this year s budget together with improvement work to the buggy paths. We have just taken possession of a new fleet of machinery as part of our four year leasing arrangement and a new office and lunchroom for our ground staff. The Golf Management Committee, who are responsible for the overall administration of golf, has worked well together this year and I thank them for their hard work and diligence. The Men s Committee decided to resign mid-year, however the Ladies and Veterans Committees continued, as always, to run smoothly under great leadership and in a friendly environment. I would like to thank and congratulate all of our staff for their professionalism and the friendly manner in which they carry out their duties. Ian Wingad Chairman Annual Report 2014-2015 9
ANNUAL REPORT 2014-2015 Bowls Management Committee Report This year saw the advent of the Bowls Management Committee and the appointment of Chris Graham as our Sports Manager. The Committee in conjunction with Chris has been working towards improving the organisation and participation in bowls. Bowlers have had a successful year on the Greens with our Men s Division 2 and Division 6 teams making the State Pennant Finals and Graeme Condie winning the District Champion of Champions Singles. Also Glenys Johnston, Lyn McGowran and Barbara Sprengel won the Women s District Triples. The new irrigation system has been installed on the Top Green and the area beautified with new gardens, seating and returfing. The Men s and Women s SIG Committees again worked tirelessly to ensure all our members and visiting bowlers were well catered for. Your efforts are greatly appreciated. Lastly, thank you to Troy for the vast improvement in our Greens. Also thank you to Shane and the rest of the Greens staff for their efforts in assisting over the year. Danny Taylor Chairman 10 Annual Report 2014-2015
OCEAN SHORES COUNTRY CLUB LTD Financial Report For The Year Ended 30 June 2015 Annual Report 2014-2015 11
Ocean Shores Country Club Ltd Financial Report For The Year Ended 30 June 2015 CONTENTS Page Directors' Report 1 Auditor's Independence Declaration 4 Statement of Profit or Loss 5 Statement of Comprehensive Income 6 Statement of Financial Position 7 Statement of Changes in Equity 8 Statement of Cash Flows 9 Notes to the Financial Statements 10 Directors' Declaration 20 Independent Auditor's Report 21 12 Annual Report 2014-2015
Directors Peter Tornaros Leslie Hoffman Nicholas Comer Anthony Dahl John Maddock Anne Slater Danny Taylor Ian Wingad OCEAN SHORES COUNTRY CLUB LTD DIRECTORS' REPORT Your Directors present this report on the company for the financial year ended 30 June 2015. The names of each person who has been a Director during the year and to the date of this report are: Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Company Secretary The Company Secretary is Andrew Spice. Principal Activities The principal activity of the company during the financial year was: The principal activities of the entity during the financial year were the provision of social and sporting facilities and those of a registered club. There were no other significant changes in the nature of the entity s principal activities during the financial year. Short-term and Long-term Objectives The company's short-term objectives are to: Enhance members and visitors Golf and Bowls experience; Maintain and / or modernise the Club s premises and facilities; Provide the best possible hospitality services to members and to the local community; Ensure ongoing profitability of the company to secure its financial future; and Promote the sporting and social operations of the company The company's long-term objectives are to: Increase the participation level of Club members through promoting the sporting and social operations of the company; Maintain a financially healthy business; Plan for the future development and expansion of the Club and facilities; and Grow the company s operations. Strategies To achieve its stated objectives, the company has adopted the following strategies: The preparation of an annual budget for financial performance. Management and Directors regularly review the company performance against the budget. Marketing the Club and its facilities Create and maintain a safe and family friendly club environment. Further develop the Club's financial strategies Key Performance Measures The company uses the following key performance indicators to measure performance: Staff Cost Gross Profit margins Operating profits Golf Course & Bowling Green usage Comparisons to industry and budgeted performances Annual Report 2014-2015 13
OCEAN SHORES COUNTRY CLUB LTD DIRECTORS' REPORT Information on Directors Peter Tornaros Qualifications Experience Special Responsibilities Leslie Hoffman Qualifications Experience Special Responsibilities Nicholas Comer Qualifications Experience Special Responsibilities Anthony Dahl Qualifications Experience Special Responsibilities John Maddock Qualifications Experience Special Responsibilities Anne Slater Qualifications Experience Special Responsibilities Danny Taylor Qualifications Experience Special Responsibilities Ian Wingad Qualifications Experience Special Responsibilities Chairman Retired Public Servant/Business Owner Director since 21/09/2003 Ex-officio all Committees Deputy Chairman Retired Journalist/Editor Daily Telegraph Director since 24/09/2006 Chairman Asset Management Committee, Bowls Management Committee Director Air Traffic Controller/Hospitality Business Owner Member of Board since 27/10/2013 Asset Management Committee Director Consultant Member of Board since 24/10/2010 Chairman Marketing & Sponsorship Committee Director Business Owner- Floor Covering & Installations Member of Board since 21/10/2012 Golf Management Committee, Marketing & Sponsorship Committee, Asset Management Committee Treasurer Retired Banker/Small Business Owner Member of Board since 23/09/2007 Chairperson Finance Committee, Asset Management Committee Bowls Director Maintenance Ganger Local Council Member of Board since 27/10/2013 Chairman Bowls Management Committee, Marketing & Sponsorship Committee Golf Director Retired Business Owner Member of Board since 21/09/2003 Chairman Golf Management Committee, Marketing & Sponsorship Committee 14 Annual Report 2014-2015
OCEAN SHORES COUNTRY CLUB LTD DIRECTORS' REPORT Meetings of Directors During the financial year,13 meetings of Directors were held. Attendances by each Director were as follows: Board Special Board Meetings Meetings Number Number Number Number Held Attended Held Attended Peter Tornaros Leslie Hoffman Nicholas Comer Anthony Dahl John Maddock Anne Slater Danny Taylor Ian Wingad 12 12 1 1 12 11 1 1 12 10 1 1 12 9 1-12 10 1 1 12 12 1 1 12 6 1-12 11 1 - The company is incorporated under the Corporations Act 2001 and is a company limited by guarantee. If the company is wound up, the constitution states that each member is required to contribute a maximum of $2 each towards meeting any outstanding obligations of the company. At 30 June 2015, the total amount that members of the company are liable to contribute if the company is wound up is $6,120 (2014: $5,758). Core Non Core Property as required under Section 41J of The Registered Clubs Act The Directors consider the Club's defined premises and all of its facilities to be Core Property. The Directors do not consider the Club to have Non-Core Property. Section 41J of the Act defines core property as meaning any real property owned or occupied by the Club that comprises:- (a) the defined premises of the club, or (b) any facility provided by the club for use of its members and their guests or (c) any other property declared, by resolution passed by a majority of the members present at a general meeting of the ordinary members of the club, not to be core property of the Club. Non-core property is defined as meaning any real property owned or occupied by the Club that is not core property. Auditor s Independence Declaration The lead auditor s independence declaration for the year ended 30 June 2015 has been received and can be found on page 4 of the financial report. Signed in accordance with a resolution of the Board of Directors. Director Dated this Peter Tornaros 14th day of September 2015 Annual Report 2014-2015 15
OCEAN SHORES COUNTRY CLUB LTD AUDITOR S INDEPENDENCE DECLARATION UNDER S 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF OCEAN SHORES COUNTRY CLUB LTD I declare that, to the best of my knowledge and belief, during the year ended 30 June 2015 there have been no contraventions of: (i) the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. Name of Firm Watson & Fenton Chartered Accountants Name of Partner Barry Dunnett Date 11/09/2015 Address 39 Wharf Street Tweed Heads NSW 2485 16 Annual Report 2014-2015
OCEAN SHORES COUNTRY CLUB LTD STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 30 JUNE 2015 Note 2015 2014 $ $ Revenue 2 3,925,227 3,877,024 Other income 2 3,283 3,318 Employee benefits expense 3(a) (1,425,171) (1,335,652) Depreciation and amortisation expense 3(a) (296,543) (260,650) Interest expense 3(a) (2,496) (1,925) Cost of sales 3(a) (855,551) (823,868) Other expenses 3(b) (1,245,522) (1,319,954) Profit/(loss) before income tax 103,227 138,293 Income tax expense 1(i) - - Profit/(loss) for the year 103,227 138,293 The accompanying notes form part of these financial statements. Annual Report 2014-2015 17
OCEAN SHORES COUNTRY CLUB LTD STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2015 2015 2014 $ $ Profit/(loss) for the year 103,227 138,293 Other comprehensive income for the year - - Total comprehensive income for the year 103,227 138,293 The accompanying notes form part of these financial statements. 18 Annual Report 2014-2015
OCEAN SHORES COUNTRY CLUB LTD STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015 Note 2015 2014 $ $ ASSETS Current Assets Cash and cash equivalents 4 349,544 347,200 Trade and other receivables 14,851 63,595 Inventories 143,725 138,117 Prepayments 26,455 25,703 Total current assets 534,575 574,615 Non-current assets Property, plant and equipment 5 2,721,915 2,478,679 Total non-current assets 2,721,915 2,478,679 TOTAL ASSETS 3,256,490 3,053,294 LIABILITIES Current liabilities Trade and other payables 6 532,943 537,646 Borrowings 7 56,657 10,584 Provisions 8 155,107 139,952 Total current liabilities 744,707 688,182 Non-current liabilities Borrowings 7 35,014 500 Provisions 8 29,851 20,923 Total non-current liabilities 64,865 21,423 TOTAL LIABILITIES 809,572 709,605 NET ASSETS 2,446,918 2,343,689 EQUITY Retained earnings 2,417,866 2,314,637 Reserves 29,052 29,052 TOTAL EQUITY 2,446,918 2,343,689 The accompanying notes form part of these financial statements. Annual Report 2014-2015 19
OCEAN SHORES COUNTRY CLUB LTD STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2015 Balance at 1 July 2013 Comprehensive Income Profit/(loss) for the year Total comprehensive income attributable to the entity Balance at 30 June 2014 Balance at 1 July 2014 Comprehensive Income Profit/(loss) for the year Total comprehensive income attributable to the entity Retained Surplus Capital Profits Reserve Total $ $ $ 2,176,346 29,052 2,205,398 138,293 138,293 138,293-138,293 2,314,639 29,052 2,343,691 2,314,639 29,052 2,343,691 103,227 103,227 103,227-103,227 Balance at 30 June 2015 2,417,866 29,052 2,446,918 The accompanying notes form part of these financial statements. 20 Annual Report 2014-2015
OCEAN SHORES COUNTRY CLUB LTD STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2015 Note 2015 2014 $ $ CASH FLOWS FROM OPERATING ACTIVITIES Receipts from members and patrons 4,269,535 4,293,146 Payments to suppliers, employees and ATO (3,811,673) (3,865,338) Interest received 2,977 1,455 Interest paid (2,496) (1,925) Net cash generated from operating activities 458,343 427,338 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment 15,136 9,091 Payment for property, plant and equipment (551,722) (305,166) Net cash from/(used in) investing activities (536,586) (296,075) CASH FLOWS FROM FINANCING ACTIVITIES Repayment of borrowings (10,584) (17,234) Proceeds from borrowings 91,171 - Net cash generated by/(used in) financing activities 80,587 (17,234) Net increase in cash held 2,344 114,029 Cash on hand at beginning of financial year 347,200 233,171 Cash on hand at end of financial year 4 349,544 347,200 The accompanying notes form part of these financial statements. Annual Report 2014-2015 21
Note 1 OCEAN SHORES COUNTRY CLUB LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 Summary of Significant Accounting Policies Basis of Preparation Ocean Shores Country Club Ltd applies Australian Accounting Standards Reduced Disclosure Requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010-2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards Reduced Disclosure Requirements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The company is a not-for-profit entity for financial reporting purposes under Australian Accounting Standards. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar. The financial statements were authorised for issue on 14 September 2015 by the directors of the company. Accounting Policies (a) Revenue Gaming subsidies are recognised in the period receipted, which aligns with the timeframe the poker machines are patronised. Revenue from gaming is derived from poker machines and is recognised 'net' of payouts to players. Revenue from beverage sales is recognised when beverage is acquired by patrons. Revenue from raffles is derived from ticket sales and is recognised in the period the raffle is drawn. Sponsorship revenue is recognised upon invoice to the sponsor; this amount is determined in accordance with the amount pledged and the timing with which the agreed pledge will flow to the Company. Revenue from membership subscriptions are recognised upon receipt. However, those received in advance for future years are deferred until those timeframes are reached and are recognised, in the meanwhile, as a liability in the statement of financial position. Revenue from members subscriptions is aligned with the period the members utilise the facilities provided and paid for. Revenue from competition and green fees are recognised when the golf course is used by playing patrons for such purposes. The receipt of fees and playing of golf usually occurs in the same timeframe. Revenue from green fees is recognised in the period the bowling green is used by playing patrons for such purposes. The receipt of fees and playing of bowls usually occurs in the same timeframe. Commission revenue derived from patronising the ATM, Keno and TAB facilities provided, are recognised in the period it is earned. Revenue from promotional rebates are recognised in the period they are earned, per the negotiated contracts. Donations and bequests are recognised as revenue when received. Interest revenue is recognised using the effective interest method, which for floating rate financial assets is the rate inherent in the instrument. Revenue from the rendering of a service is recognised upon the delivery of the service to the customers. All revenue is stated net of the amount of goods and services tax (GST). (b) Property, Plant and Equipment The entity applies the cost model as its accounting policy to property, plant and equipment. Freehold Property Freehold land is shown at cost. Buildings are shown at cost less accumulated depreciation and any accumulated impairment losses. In the event the carrying amount of buildings is greater than its estimated recoverable amount, the carrying amount is written down immediately to its estimated recoverable amount and impairment losses recognised in profit and loss. 22 Annual Report 2014-2015 10
OCEAN SHORES COUNTRY CLUB LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 Plant and Equipment Plant and equipment are measured on the cost basis and are therefore carried at cost less accumulated depreciation and any accumulated impairment losses. In the event the carrying amount of plant and equipment is greater than its estimated recoverable amount, the carrying amount is written down immediately to its estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(e) for details of impairment). Plant and equipment that have been contributed at no cost, or for nominal cost, are valued and recognised at the fair value of the asset at the date it is acquired. (c) (d) Depreciation The depreciable amount of all fixed assets, including buildings and capitalised lease assets but excluding freehold land, is depreciated on a straight-line basis over the asset's useful life to the entity commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Buildings 2.5-5% Plant and equipment 7.5-34% Leased plant and equipment 20-25% The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are recognised in profit or loss in the period in which they arise. Leases Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset (but not the legal ownership) are transferred to the entity, are classified as finance leases. Finance leases are capitalised, recognising an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual values. Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the entity will obtain ownership of the asset. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses on a straight-line basis over the lease term. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term. Financial Instruments Initial Recognition and Measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either purchase or sell the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transactions costs except where the instrument is classified at fair value through profit or loss in which case transaction costs are recognised immediately as expenses in profit or loss. Classification and Subsequent Measurement Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method, or cost. (i) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. (ii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the company s intention to hold these investments to maturity. They are subsequently measured at amortised cost. 11 Annual Report 2014-2015 23
OCEAN SHORES COUNTRY CLUB LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 (iii) Financial liabilities Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Impairment At the end of each reporting period, the company assesses whether there is objective evidence that a financial asset has been impaired. Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised when the related obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability, which is extinguished or transferred to another party, and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. (e) (f) Impairment of Assets At the end of each reporting period, the entity assesses whether there is any indication that an asset may be impaired. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset s fair value less costs to sell and value in use, to the asset s carrying amount. Any excess of the asset s carrying amount over its recoverable amount is recognised immediately in profit or loss. Where it is not possible to estimate the recoverable amount of an individual asset, the entity estimates the recoverable amount of the cash-generating unit to which the asset belongs. Employee Benefits Short-term employee benefits Provision is made for the Company s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled. The Company s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as a part of current trade and other payables in the statement of financial position. Other long-term employee benefits The company classifies employees long service leave and annual leave entitlements as other long-term employee benefits as they are not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Provision is made for the company s obligation for other long-term employee benefits, which are measured at the present value of the expected future payments to be made to employees. Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures, and are discounted at rates determined by reference to market yields at the end of the reporting period on government bonds that have maturity dates that approximate the terms of the obligations. Upon the remeasurement of obligations for other long-term employee benefits, the net change in the obligation is recognised in profit or loss classified under employee benefits expense. The Company s obligations for long-term employee benefits are presented as non-current liabilities in its statement of financial position, except where the Company does not have an unconditional right to defer settlement for at least twelve months after the reporting date, in which case the obligations are presented as current liabilities. Retirement benefit obligations Defined contribution superannuation benefits All employees of the company receive defined contribution superannuation entitlements, for which the company pays the fixed superannuation guarantee contribution (revised from 9.25% to 9.5% with effect from 1 July 2014) to the employee s superannuation fund of choice. All contributions in respect of employees defined contribution entitlements are recognised as an expense when they become payable. The company s obligation with respect to employees defined contribution entitlements is limited to its obligation for any unpaid superannuation guarantee contributions at the end of the reporting period. All obligations for unpaid superannuation guarantee contributions are measured at the (undiscounted) amounts expected to be paid when the obligation is settled and are presented as current liabilities in the company s statement of financial position. (g) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at-call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. 24 Annual Report 2014-2015
OCEAN SHORES COUNTRY CLUB LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 (h) (i) (j) (k) (l) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. Income Tax No provision for income tax has been raised as the entity is exempt from income tax under Div 50 of the Income Tax Assessment Act 1997. Provisions Provisions are recognised when the entity has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of reporting period. Comparative Figures Where required by Accounting Standards comparative figures have been adjusted to conform with changes in presentation for the current financial year. Trade and Other Payables Trade and other payables represent the liabilities for goods and services received by the company during the reporting period that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. (m) Critical Accounting Estimates and Judgements The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company. (n) Key Estimates Depreciation Assessments are made on the useful lives of fixed assets. Depreciation rates are set accordingly. Long Service Leave Entitlements Assessments are made on the probability of staff taking long service leave. This took into account history with the Club itself and characterisation of the Club industry. Staff with four years services were assessed at 49%, seven years at 75% and 9 years and beyond that at 100%. Economic Dependence Ocean Shores Country Club Ltd is dependent on the members and its patrons for the majority of its revenue used to operate the business. At the date of this report the Board of Directors has no reason to believe the members will not continue to support Ocean Shores Country Club Ltd. Annual Report 2014-2015 25
Note 2 OCEAN SHORES COUNTRY CLUB LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 Revenue and Other Income 2015 2014 Revenue $ $ Revenue from government grants and operating activities Government subsidy 17,180 17,190 Bar (beverage) 1,318,531 1,262,084 Golf 859,046 834,981 Gaming 847,193 900,605 Pro-shop 431,936 427,569 Halfway House 148,673 152,477 TAB, Keno and ATM commission 103,347 89,914 Bowling 68,889 73,658 Raffles (house) 62,559 67,199 Other 64,896 49,892 3,922,250 3,875,569 Other revenue Interest received 2,977 1,455 2,977 1,455 Total revenue 3,925,227 3,877,024 Other income Gain on disposal of property, plant and equipment 3,283 3,318 Total other income 3,283 3,318 Total revenue and other income 3,928,510 3,880,342 Note 3 (a) Expenses Note 2015 2014 $ $ Expenses Employee benefits expense: Employee benefits expense including contributions to defined contribution superannuation funds 1,425,171 1,335,652 Employee on-costs expenses 3(b) 94,079 100,277 Total employee benefits expense 1,519,250 1,435,929 Depreciation and amortisation: Buildings 79,591 77,944 Plant and equipment 196,748 161,378 Leased assets 20,204 21,328 Total depreciation and amortisation 296,543 260,650 Finance costs: Interest expense on financial liabilities 2,496 1,925 Cost of sales Bar 591,908 567,085 Pro-shop - sale of goods 190,141 182,109 Halfway House 73,502 74,674 855,551 823,868 26 Annual Report 2014-2015
OCEAN SHORES COUNTRY CLUB LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 (b) Other Note Repairs and Maintenance 135,874 150,113 Operating lease rentals 113,800 114,603 Prizes 104,497 113,311 Employee on costs 3(a) 94,079 100,277 Advertising & promotions 87,342 70,880 Electricity & gas 81,656 89,313 Fertilisers, sand and chemicals 73,190 70,695 Raffle & members draw expenses 60,684 72,784 Fuel and other vehicle costs 40,242 39,862 Insurance 34,757 34,366 Rates and water 29,748 27,871 Members amenities 29,436 31,008 Affiliation fees 26,967 28,779 Entertainment 23,740 15,997 Security 22,943 22,673 Mid week packages-lunches 21,354 20,376 TAB Sky television 18,525 19,506 Printing and stationery 18,522 18,262 Central Monitoring expenses 17,109 16,632 Cleaning supplies 10,843 10,543 Computer expenses 8,715 8,255 Legal expenses 1,825 914 Other operating expenses 189,674 242,934 1,245,522 1,319,954 Note 4 Cash and Cash Equivalents 2015 2014 $ $ CURRENT Cash float 93,437 82,591 TAB Account 4,346 4,673 Keno Account 2,590 5,469 Business Management Account 49,171 104,012 On Line Saver 200,000 150,455 Total cash and cash equivalents as stated in the statement of financial position 13 349,544 347,200 Total cash and cash equivalents as stated in the cash flow statement 349,544 347,200 Note 5 Property, Plant and Equipment 2015 2014 $ $ LAND AND BUILDINGS Freehold land: At cost 472,216 472,216 Total land 472,216 472,216 Buildings: At cost 1,978,626 1,809,637 Less accumulated depreciation (649,797) (586,114) Total buildings 1,328,829 1,223,523 Total land and buildings 1,801,045 1,695,739 Annual Report 2014-2015 27
OCEAN SHORES COUNTRY CLUB LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 PLANT AND EQUIPMENT Plant and equipment: At cost 2,634,163 2,584,390 Less accumulated depreciation (1,872,059) (1,824,792) 762,104 759,598 Leased assets: At cost 313,257 85,312 Less accumulated depreciation (161,586) (67,817) 151,671 17,495 CAPITAL WORKS IN PROGRESS (CWIP): At cost 7,095 5,847 Total plant & equipment and CWIP 920,870 782,940 Total property, plant & equipment 2,721,915 2,478,679 Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Land $ Buildings $ Plant and Equipment $ Leased Assets $ Capital Works in Progress $ 2015 Balance at the beginning of the year 472,216 1,223,523 759,598 17,495 5,847 2,478,679 Additions at cost - 196,841 199,253 154,380 1,248 551,722 Disposals - (11,943) - - - (11,943) Depreciation expense - (79,591) (196,748) (20,204) - (296,543) Carrying amount at the end of the year 472,216 1,328,830 762,103 151,671 7,095 2,721,915 Note 6 Trade and Other Payables 2015 2014 Note $ $ CURRENT Trade payables 102,692 65,759 Deferred income 258,489 262,005 Accrued expenses GST payable (and tax reconciliation account) Golf points accrued Sponsorships payable Special Interest Groups and sundries Total $ 59,616 54,126 48,638 97,806 41,205 38,420 22,303 17,362-2,168 6(a) 532,943 537,646 (a) Financial liabilities at amortised cost classified as trade and other payables Trade and other payables: Total current 532,943 537,646 532,943 537,646 Less deferred income (258,489) (262,005) Financial liabilities as trade and other payables 13 274,454 275,641 2015 $ 2014 $ 28 Annual Report 2014-2015
Note 7 OCEAN SHORES COUNTRY CLUB LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 Borrowings 2015 2014 Note $ $ CURRENT Instalment arrangements (poker machines) 56,657 10,584 56,657 10,584 NON-CURRENT Instalment arrangements (poker machines) Bank Loan 34,514-7(a) 500 500 35,014 500 TOTAL BORROWINGS 13 91,671 11,084 (a) Bank Loan Details and security A Better Business loan was concluded with Commonwealth Bank of Australia ('CBA') in May 2012, as a consequence of the renovations to the clubhouse. This loan has since been settled. The Board has chosen to leave this loan 'open' with a very small balance. Security provided was a First Registered Mortgage over non residential real estate property located at 113A Orana Rd Ocean Shores NSW 2483. Facility The loan has a 'redraw facility' where funds can be redrawn up to the original amount of $100,000, should the Board so choose. (b) Instalment arrangements Various gaming suppliers have granted the company between 1 and 3 year, interest free, instalment arrangements to acquire poker machines. The arrangements are secured to the extent that the poker machines remain the property of the various gaming suppliers until the final instalment has been paid. Note 8 Provisions 2015 2014 CURRENT $ $ Provision for employee benefits: annual leave 122,484 107,184 Provision for employee benefits: long service leave 32,623 32,768 155,107 139,952 NON-CURRENT Provision for employee benefits: long service leave 29,851 20,923 29,851 20,923 184,958 160,875 Analysis of total provisions: Opening balance at 1 July 2014 Additional provisions raised during year Amounts used Balance at 30 June 2015 Employee Benefits 160,875 101,033 (76,950) 184,958 Employee Provisions Employee provisions represents amounts accrued for annual leave and long service leave. The current portion for this provision includes the total amount accrued for annual leave entitlements and the amounts accrued for long service leave entitlements that have vested due to employees having completed the required period of service. Based on past experience, the company does not expect the full amount of annual leave or long service leave balances classified as current liabilities to be settled within the next 12 months. However, these amounts must be classified as current liabilities since the company does not have an unconditional right to defer the settlement of these amounts in the event employees wish to use their leave entitlement. The non-current portion for this provision includes amounts accrued for long service leave entitlements that have not yet vested in relation to those employees who have not yet completed the required period of service. 17 Annual Report 2014-2015 29
OCEAN SHORES COUNTRY CLUB LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based upon historical data. The measurement and recognition criteria for employee benefits have been discussed in Note 1(f). Note 9 (a) Note 10 Lease Commitments Capital and Leasing Commitments Lease commitments, at 30 June 2015, amount to $93,288 of which $60,210 is due within 12 months and the balance within 5 years. Such lease commitments include golf course equipment and golf carts. We draw your attention to Note 10. Events After the Reporting Period The directors are not aware of any significant events since the end of the reporting period, other than the following: The Board have approved and accepted four new financial arrangements for the next Golf Course Machinery Fleet. (1) An Operating Lease over 60 months with a total value of $171,850 (incl GST) and a monthly repayment of $2,666.39. (2) A Lease over 60 months with a total value of $62,340 (incl GST) and a monthly repayment of $1,146.44. (3) A Lease over 36 months with a total value of $100,920 (incl GST) and a monthly repayment of $2,965.01. (4) A Lease over 60 months with a total value of $79,540 (incl GST) and a monthly repayment of $1,260.85. The existing operating lease in regards to the golf course equipment, which incurs a monthly repayment of $5,954, expires on 23 September 2015. The abovementioned leases replace and enhance this. Note 11 a. Key Management Personnel Any person(s) having authority and responsibility for planning, directing and controlling the activities of the company directly or indirectly, including any director (whether executive or otherwise) is considered key management personnel. 2015 2014 $ $ Key management personnel compensation 171,574 172,782 b. Other Related Parties Other related parties include close family members of Key Management Personnel, and entities that are controlled or jointly controlled by those Key Management Personnel individually or collectively with their close family members. Note 12 Related Party Transactions The totals of remuneration paid to key management personnel (KMP) of the company during the year are as follows: Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other persons unless otherwise stated. During the year staff (family of key management) earned wages of $31,428 which includes superannuation. Cash Flow Information 2015 2014 $ $ Reconciliation of Cash Flow from Operating Activities with Current Year Surplus Profit after income tax 103,227 138,293 Non-cash flows: Depreciation and amortisation expense 296,543 260,650 Gains on disposal of property, plant and equipment (15,136) (3,318) Loss on disposal of property, plant and equipment 11,944 Changes in assets and liabilities: (Increase)/decrease in accounts receivable and other debtors 3,135 23,171 Increase/(decrease) in accounts payable and other payables 40,905 (11,151) Increase/(decrease) in employee provisions 24,084 20,084 (Increase)/decrease in inventories on hand (5,607) 3,213 (Increase)/decrease in prepayments (752) (3,604) 458,343 427,338 30 Annual Report 2014-2015